Bangladesh was plunged into political chaos last night as elections scheduled for January 22 were postponed and its president stepped down as interim leader shortly after declaring a state of emergency following weeks of street protests.

Iajuddin Ahmed, who was head of the interim government that had been in place since October, was reported to be continuing as the figurehead president, according to the state-run BSS and private United News of Bangladesh news agencies. BSS said Mr Ahmed had appointed his senior adviser, Fazlul Haque, as acting chief of the caretaker authority.

In a televised speech yesterday Mr Ahmed said: "It's not possible to hold the elections on schedule. We need a flawless voter list to ensure that the elections are free, fair and credible."

He did not specify an alternative date for the elections.

Earlier yesterday Mr Ahmed had cancelled TV news programmes, ordered an indefinite all-night curfew and suspended citizens' rights. The president's office gave a statement saying that there was a "grave emergency ... in the country, threatening public security and [the] economy".

The curfew has been imposed in the capital, Dhaka, and another 60 cities and towns, and the clampdown will clear roads for six hours from 11pm until dawn.

Britain, Canada, the US and Japan had expressed concern at the "one-sided" election because of the boycott by the 19-party opposition led by the Awami League, whose leader, Sheikh Hasina Wajed, had argued that the president would rig the polls in favour of the outgoing administration.

The UN had earlier suspended all technical support for the elections, while the European commission said it had also decided to suspend its poll observations.

At least 45 people have been killed and hundreds have been injured in pre-election violence since November. Soldiers have taken to the streets to keep order and observers noted that the decision for emergency rule came hours after the president met the chief of the army staff, Lieutenant General Moeen Ahmed.

Analysts say that the rivalry between Sheikh Hasina and the last prime minister, Begum Khaleda Zia, has irreparably damaged politics in the country. The pair have not spoken to each other for more than a decade. There are now widespread fears that the political order could break down, leading to either a military government or yet more space for hardline Islamist groups.

One diplomat said that while the two politicians fought, the country risked falling into the army's hands. "The depressing result could be military rule."